Weekly Forex Review – Week Commencing 9th January 2017
Monday was quiet with no Tier I data.
Fed’s Rosengren (Soft Hawk, Non-Voter) says that a positive surprise could see inflation overshoot and urges the Fed to begin a balance sheet debate. (Newswires) This is a reference to QE, specifically the unwinding of QE by no longer re-investing in the market when bonds previously bought come to maturity and/or by simply selling currently held bonds. This could have a major depressive effect on US equities and would strengthen the USD.
Early Tuesday saw AUD Retail Sales m/m miss (0.2% vs 0.4%).
Trump Press conference:
• The key reaction was a sell-off in the USD, as Trump failed to mention any fiscal stimulus or the economy
• Stocks were choppy but ended the session in marginal positive territory – as higher crude prices lent some support
• Focus fell upon recent BuzzFeed allegations, but criticism towards pharma companies caused a selloff in the health-care sector, particularly biotech stocks
US Core Retails Sales disappointed (0.2% vs 0.5%) and headline Retail Sales exceeded expectation (0.6% vs 0.5%).
USD takes a bit if a dip after Trump fails to mention fiscal stimulus at Wednesday’s press conference. Global shares are buoyant. The EUR consolidate4s and the JPY strengthens as the USD weakens. The GBP falls on increasing “hard Brexit” talk. Oil and CAD consolidate.
I did not trade last week.
Weekly Forex Outlook – Week Commencing 16th January 2017
Over the weekend/early today:
Focus for FX markets was on GBP which hit a 2-month low after reports that UK PM May is to unveil plans for a hard Brexit at her speech on Tuesday.
Tues – UK CPI; UK PM Teresa May speaks about Brexit plans.
Wed – UK Average Earnings; US Core and Headline CPI; CAD Rate Statement
Thurs – EUR Minimum Bid Rate and Press Conference
Fri – Trump Inauguaration (noon, EST); UK Retail Sales; CAD CPI and Retail Sales
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